Compute the payments due in the first year on a three-year amortizing swap from company B to company A.Company A and company B both want to borrow £1,000,000 for three years.A wants to borrow floating and B wants to borrow fixed.A and B agree to split the QSD.

$$\begin{array} { c c c }
& \text { Fixed-Rate Borrowirg } & \text {Floatirig-Rate Bort owirig } \
& \text { Cost } & \text { Cost } \
\text { Compary A } &10 \% & LIBOR\
\text { Compary B }& 12 \% & LIBOR+1.5 \%
\end{array}$$
A)B pays £402,114.80 to A
B)B pays £100,000 to A
C)B pays £69,788.52 to A
D)none of the options

Question

Compute the payments due in the first year on a three-year amortizing swap from company B to company A.Company A and company B both want to borrow £1,000,000 for three years.A wants to borrow floating and B wants to borrow fixed.A and B agree to split the QSD.

$$\begin{array} { c c c } 
& \text {  Fixed-Rate Borrowirg } & \text {Floatirig-Rate Bort owirig  } \
& \text { Cost } & \text { Cost } \
\text { Compary A }  &10 \% & LIBOR\
\text { Compary B }& 12 \% & LIBOR+1.5 \%
\end{array}$$
A)B pays £402,114.80 to A
B)B pays £100,000 to A
C)B pays £69,788.52 to A
D)none of the options

Quizplus · Accepted Answer

The Answer of Compute the payments due in the first year on a three-year amortizing swap from company B to company A.Company A and company B both want to borrow £1,000,000 for three years.A wants to borrow floating and B wants to borrow fixed.A and B agree to split the QSD.

$$\begin{array} { c c c } 
& \text {  Fixed-Rate Borrowirg } & \text {Floatirig-Rate Bort owirig  } \
& \text { Cost } & \text { Cost } \
\text { Compary A }  &10 \% & LIBOR\
\text { Compary B }& 12 \% & LIBOR+1.5 \%
\end{array}$$
A)B pays £402,114.80 to A
B)B pays £100,000 to A
C)B pays £69,788.52 to A
D)none of the options

Compute the Payments Due in the First Year on a Three-Year